Global Markets

Comparisons of the 2014, 2016, 2018 IMF Reports Based on Economic Indicators


2014 real GDP estimated at about 6.23% compared to 5.4% in 2013. Growth was generally driven by the non-oil sector. The economy is diverse with services accounting for 50% and oil only 13% of GDP in 2013. Growth was driven by the non-oil sector and private consumption, Nigeria still lagged in critical infrastructure, had high rates of poverty, faced income inequality and faced development challenges. Real GDP grew by 6.1% in Q3 of 2014. The non-oil sector remained robust up to 7.3% but the oil sector declined by 3.6% mostly driven by an increase in immediate cost. In 2016, the fall in oil prices decimated government revenues which fell to 7.8% of GDP and doubled government deficit to about 3.2% of GDP in 2015. The weak growth seen in 2015 was expected to continue. Overall growth was projected at 2.3% below the 2.7% recorded in 2015. Economic performance was weaker with growth slowing down from 6.3% in 2014 to 2.7%. In 2018, growth picked up but is still slow. After five quarters of recession, economic activities expanded by 0.8% in Q2 and by 1.3% in Q3 of 2017 driven by recovering oil production and agriculture.

So in summary, growth in 2014 was largely driven by the non-oil sector (service, agriculture, telecommunication, manufacturing, etc.) However, due to the fall in oil prices and recession that plunged the economy in Q2 of 2016, overall growth fell and economic performance became weaker but in 2018, growth started picking up after Nigeria came out of recession in Q2 of 2017. Economic activities expanded which was largely driven by oil production and agriculture.


The Nigerian economy attracted a total investment inflow of $27.9bn between July 2016 and March 2018. It was revealed that prior to the economic recession of 2015, the level of investment inflows was at an upward trajectory. In 2014, total investment was set at 15.1% with public investment taking 2.5% and private taking 12.6%. in 2016, total investment dropped to 12.6% with public investment dropping to 2.2%, 0.3% less than that of 2014 and private investment dropping to 10.4%, 2.2% less than 2014. In 2018, total investment is projected to be 13.3% which is a growth from that of 2016. Public investment set at 2.7% and private investment at 10.5%. In 2014, investment was $20.76bn and dropped to $9.65bn in 2015. In 2016, it further dropped to $5.1bn. Recovery then began in 2017, as investors raised their stake by $7.1bn to $12.2bn.


In 2014, both oil revenue and non-oil revenue amounted for 10.5% in the total revenue and total expenditure amounted for 12.3%. Overall balance was a deficit at -1.8%, non-oil balance was also a deficit at -8.2%, financing at -1.8%, external at 0.3%, borrowing at 0.3%, amortization at 0.0%, domestic at 2.9%, bank financing at 2.7% o/w ECA financing at 0.0%, nonbank financing at 0.1%, statistical discrepancy/ financing gap at -1.4%. In 2016, total revenue was 5.6%, 4.9% lower than that of 2014, total expenditure was 9.5%, overall balance at -3.9%, external at 0.1%, borrowing at 0.2%, amortization at 0.0%, domestic at 2.9%, bank financing at 2.3%, CBN-, commercial banks-, nonbank financing at 0.6%, asset disposal-, statistical discrepancy/ financing gap- 0.9%. In 2018, projections made were total revenue at 7.4%, total expenditure at 11.9%, overall balance at -4.5%, non-oil primary balance at -7.6%, financing at 4.5%, external at 0.7%, borrowing at 0.9%, amortization at 0.2%, domestic at 3.7%, bank financing at 3.3%, CBN at 3.1%, commercial banks at 0.2%, nonbank financing at 0.4%, asset disposal at 0.1%, statistical discrepancy/financing gap at 0.0%. From the total revenue for 2014, 2016, 2018, it is noticed in 2016 that total revenue dropped by a whopping 4.9% and this was due to the recession and the fall in oil prices. It has been projected that total revenue for 2018 will increase from 5.6% to 7.4%. Not a high figure but we can say it’s encouraging. Overall balance was also higher in 2016 at -3.6% than in 2014 which was -1.8%. Borrowing will be at the highest in 2018 at 0.9% compared to 0.2% in 2016 and 0.3% in 2014


Dependency on oil is still very high as Nigeria’s non-oil revenue is one of the lowest among major commodity producers. In 2014, non-oil tax revenue was estimated at only 4% of GDP far below the average of 15% of GDP for other oil exporters. In 2015, exports of non-oil goods and services amounted to just 1.2% of GDP and have remained in a narrow range below 2% of GDP over the past decade. The authorities are determined to reduce dependence on oil revenue and create space for private sector investment.


2014 real GDP estimated at about 6.23% compared to 5.4% in 2013. Growth was generally driven by the non-oil sector. The economy is diverse with services accounting for 50% and oil only 13% of GDP in 2013. In 2018, growth picked up but is still slow. After five quarters of recession, economic activities expanded by 0.8% in Q2 and by 1.3% in Q3 of 2017 driven by recovering oil production and agriculture.


2015 budget took significant actions to boost revenue. 2016 budget prioritized early action on administrative improvements. The budget provided support to grow through a significant shift in the composition of fiscal spending. The budget also raised non-oil revenue by 0.4% and further enhancing resources through more efficiency in the sector including improvement in tax compliance, broadening the base, closing the loopholes and reducing tax exemptions. The 2018 budget targets a significant fiscal consolidation and a reduction of the overall fiscal deficit from 4.3% of GDP in 2017 to 1.4% of GDP in 2018.


In 2014, inflation remain within the CBN’s 6-9% target range, declining to 8% at the end of 2014. In 2016, inflation exceeded the CBN’s medium term target band of 6-9% up at 11.4% in February 2016 and 9.6% in December 2015. The rise in inflation was linked to subsisting shortage of fuel, exchange rate pass from exported goods, seasonal factors and high electricity tariff. Supply factors are keeping inflation rates high. Inflation declined to 15.4% by end of December 2017 from 18.5% at end of 2016. Core inflation has remained below 13% since May. Food inflation remains persistently high at 19%. Inflation has since moderated to 15.1% in January 2018 and maintained the trend indicating twelfth consecutive month of decline and is expected to reach lower double digit rates by end of 2018.


IN 2014, reserves were $34.3bn at the end of December down from $42.8bn at the end of 2013 and sufficient to cover 6 months of the next years projected imports. At the end of 2015, reserves were $28.3bn down from $42.8bn at the end of 2013. As at October 2016, reserves were $23bn. As at December 2017, reserves were $38.2bn. External reserves are at a four-year high. The trade balance turned into a surplus for the first time in two years as imports compressed and recovering oil prices and production boosted exports. Foreign exchange reserves amount to $45.2bn in 2018.


In 2014, ease of doing of business in Nigeria reached an all-time high of 170th position. In 2016, it dropped to 169th position. Authorities acknowledged the need to continue their effort to enhance the business climate, including items of coordination with the tax authorities at the state level to address issues of tax duplication. In 2018, Nigeria’s ranking among the 10 economies showing the most improvement in the recent World Bank doing business ranking (rising by 24 places to 145th place) is commendable.


In 2014, oil output decreased, leading to unexpected decline in exports and budgetary revenues. Oil revenues to the federation in 2013 were 24.4% lower than expected. The country lost more than $10bn in external reserves and almost exhausted its fiscal reserve fund (excess crude account). Nigeria came under considerable pressure by early 2014. Macroeconomic trends were considerably more favourable in Q2 of 2014. Oil revenues to the federation increased notably, budgetary revenues to the federation in the first five months of the year were considerably higher than planned, the excess crude account has received augmentation and foreign reserve position has stabilized. Two important potentially important destabilizing macroeconomic risks remain; a negative shock to oil prices or oil output and volatility in short-term capital flows. Country appeared to be experiencing strong economic growth averaging 7% annually, which was particularly concentrated in the pro-poor areas of agriculture and trade. The national per capita poverty remained very high at more 60% of the population. Estimated GDP increased to $509bn due to recent rebasing of the national accounts, making Nigeria the 26th largest economy in the world.

The economy continued to show signs of recovery from the 2016 recession. GDP growth was estimated at 0.8% in 2017 up from -1.5% in 2016. The outlook beyond is positive, with growth projected at 2.1% in 2018. This outlook is anchored in higher oil prices and production as well as stronger agricultural performance. Oil prices rebounded to an average of $52 per barrel in 2017 and projected to reach $54 in 2018 up from $43 in 2016. Oil production also increased from 1.45 million barrels per day in Q1 of 2017 to 2.03milliom in Q3 of 2017 following the de-escalation of hostilities in the Niger Delta region and is expected to remain at the same level in 2018. Fiscal policy remained expansionary in 2017 as in 2016. Spending as a percentage of GDP declined from 13% in 2014 to 10.3% in 2017, revenues declined more sharply from 11.4% to 5.6%. The budget deficit was estimated at 4.8% in 2017 up from 4.7% in 2016 and is projected to improve to 4.3% in 2018 as revenue performance improves. At 14%, unemployment remained high in 2017 same as 2016 and is expected to decline slightly in 2018, to 13.5%. Monetary policy continued to be contractionary in 2017 and is expected to remain so in 2018. The policy rate has been kept at 14% since July 2016 to support the Naira and control inflation. Inflation has remained stubbornly high and in the double digits. Foreign currency liquidity has improved following the introduction of administrative measures by the Central Bank since early 2017.



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